CNBC’s Jim Cramer on Monday warned investors that thin-trading stocks early in the morning before trading is not a sound strategy.
“The sale of these Nasdaq names between 4 a.m. and 4:30 a.m. is terrifying.” Cramer said on “Squawk on the Street”. “I always think it’s a machine or an idiot, because who wants to sell there without real buyers.”
Nasdaq-linked futures, which were down 2.6% last week, did not participate in Monday’s rebound, which drove many non-tech stocks higher before regular Wall Street trading hours at 9:30 a.m. ET started. After the opening, the Nasdaq rose but fell short of the strong rallies in the Dow Jones Industrial Average and the S&P 500.
The Nasdaq was about 6% off its last record high on November 19th on Friday. The Dow was about 5% off its November 8th high. The S&P 500 was nearly 3.7% off its November 18th record high.
Cramer said many of the big tech stocks that make up the Nasdaq are in a bear market, defined as 20% or more away from recent highs.
“Swapping the ribbon is a real mistake here. It could reverse itself in a nanosecond,” Cramer said earlier in CNBC’s “Squawk Box,” pointing out that selling on Nasdaq could turn into buy in this volatile market environment .
Cramer has never shied away from criticizing “pajama dealers,” as he calls them. In some examples, the Mad Money host blew them up in 2017 and 2019.
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